TERMINATION DUE TO REDUNDANCY IS VALID WHEN CONTINUED OPERATION OF THE OFFICE IS DEEMED UNNECESSARY

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Termination due to redundancy is valid when all the requirements are complied with. Thus, the SC held in the following case:

Aparicio, et al vs. Manila Broadcasting Company
G.R. No. 220647, December 10, 2019

Project employment; Redundancy; Courts will not interfere in redundancy unless management is shown to have acted arbitrarily or maliciously; Employer has no legal obligation to keep more employees than are necessary for its business operation; Constructive service; There must be conclusive proof that a first notice was duly sent by the postmaster to the addressee; Not only is it required that notice of the registered mail be issued but it should also be delivered to and received by the addressee; Presumption that official duty has been regularly performed is not applicable in this situation; It is incumbent upon a party who relies on constructive service to prove that the notice was sent to, and received by, the addressee; Best evidence is a certification from the postmaster

Facts:

Petitioners Noli Aparicio and Renan Clarito (Aparicio, et al.) worked as radio technicians with respondent Manila Broadcasting Company (MBC), a corporation engaged in radio broadcasting.

Aparicio, et al. were both assigned at the transmitter site of DYEZ (local AM radio) and DZRH (a relaying station and a nationwide AM radio) in Barangay Taloc, Bago City. Other employees were assigned at the studio transmitter of YES FM in Bacolod City.

Aparicio, et al. were surprised to receive a notice form MBC President terminating their employment with separation pay effective 30 days from notice. Other employees signed a quitclaim, believing their dismissal was valid. Aparicio, et al. and the rest of employee sued for illegal dismissal.

On the part of MBC, it alleged that sometime in the last quarter of 2001, the management was directed to review the operations of all MBC stations. The review revealed several losing stations were subsidized by the more profitable Manila stations. As remedial measure, Chairman Fred Elizalde, through Memorandum dated January 10, 2002, implemented the policy dubbed as “Hating Kapatid.” Under it, each station was considered independent of the Head Office and will no longer be subsidized. As a result, each station had to review its own manpower complement.

Being one of the losing MBC stations, FFES Bacolod, a relay station of DZRH, was shut down. The employees assigned there, including Aparicio, et al. were retrenched. It was ascertained that FFES Bacolodneed not continue to operate as a relay station of DZRH since anyway DZRH can be heard in Bacolod City through FFES Iloilo.

Aparicio, et al received the notices of retrenchment on February 28, 2002. On the same day, the company submitted its Revised RRS Form and the Establishment Report to the Department of Labor and Employment (DOLE). It informed the DOLE that the retrenchment program was brought about by redundancy and the company reorganization and downsizing.

The retrenched employees, thereafter, received their separation pay equivalent to one (1) month for every year of service effective thirty (30) days from notice. Aparicio, et al. and others filed separate complaints for illegal dismissal, reinstatement, backwages, moral damages, exemplary damages, and attorney’s fees against MBC.

LA Ruling:

The Labor Arbiter (LA) held that Aparicio, et al. were illegally dismissed

The LA held that there was no evidence that MBC suffered from serious business losses and financial reverses. There was no showing either that it used fair and reasonable criteria in choosing the positions to be retrenched. The mechanics of the “Hating Kapatid” program was not even explained to the employees. The LA awarded separation pay in lieu of reinstatement.

MBC appealed. MBC asserted that it only became aware of the LA’s decision when it received Aparicio, et al.’s memorandum of appeal. It therefore filed a manifestation for the LA to furnish it with copy of the decision but Aparicio, et al. opposed it.

Aparicio, et al. argued that the decision had become final and executory as against the company. The NLRC, nonetheless, furnished them, by mail, with copy of the LA’s decision on January 25, 2008.

NLRC Ruling:

The National Labor Relations Commission (NLRC) reversed the LA.

The NLRC found that MBC’s appeal was timely filed. ON the merits, it ruled that reorganization is a jurisprudentially acknowledged cost-saving measure. An employer is not precluded from adopting a new policy conducive to a more economical and effective management. The law does not require that financial losses be actually suffered by the company before it can terminate the services of an employee on ground of redundancy.

Aparicio, et al. moved for reconsideration which the NLRC denied. They went to the Court of Appeals (CA) on certiorari. They argued that it was highly implausible for MBC to have received copy of the LA’s decision only on February 7, 2008. In fact, the LA’s Notice of Decision dated August 23, 2007 indicated that all counsels were furnished copies of the LA’s decision at their respective addresses on record. Copy of the LA’s decision was even furnished not only to MBC’s counsel but to its president, as well.

Aparicio, et al. further argued that the office address of MBC’s counsel, Atty. Bugay, as indicated on record is in Makati City. He moved his office to Pasay City without notice to the LA. On November 5, 2007, the notice of decision was served on his address on record in Makati City but was returned unserved because he “moved out.” Five days later, or on November 10, 2007, the service of notice of the decision on MBC was deemed complete. From November 10, 2007, MBC only had ten days or until November 20, 2007 to appeal to the NLRC. The appeal, nonetheless, was belatedly filed on February 18, 2008.

MBC responded that when the LA sent copy of the one of its Orders to Atty. Bugay’s new address on June 7, 2004, the same was already a formal recognition on record of said address. The NLRC is not bound to adopt the LA’s findings. It is in fact authorized to make its own evaluation of the evidence and based thereon make its own factual findings.

CA Ruling:

The CA held that the MBC’s appeal was timely filed.

The CA held that there was no valid service of the LA’s decision on counsel’s new address on record. On this score, there was no evidence showing that counsel failed to give notice of his new office address to the LA.

As for Aparicio, et al., the CA found that their services were no longer needed because FFES Bacolod, where they were assigned, was already abolished.

Both MBC and Aparicio, et al. moved for partial reconsideration, which the CA denied. Only Aparicio, et al. sough the Supreme Court’s discretionary appellate jurisdiction to grant them affirmative relieve from the CA’s assailed dispositions.

Issue/s:

Whether or not there is constructive service of the Decision based on a remark that the counsel “moved out” from his office

Whether or not there is valid redundancy

SC Ruling:

The SC dismissed the petition.

The SC held that MBC’s appeal was timely filed. The SC, citing Bernarte vs. PBA, ruled that insofar as constructive service is concerned, there must be conclusive proof that a first notice was duly sent by the postmaster to the addressee. Not only is it required that notice of the registered mail be issued but that it should also be delivered to and received by the addressee. Notably, the presumption that official duty has been regularly performed is not applicable in this situation. It is incumbent upon a party who relies on constructive service to prove that the notice was sent to, and received by, the addressee.

The best evidence to prove that notice was sent would be a certification from the postmaster, who should certify not only that the notice was issued or sent but also as to how, when and to whom the delivery and receipt was made. The mailman may also testify that the notice was actually delivered.

As proof that MBC, through counsel, was supposedly served with notice of the LA’s decision at counsel’s former address, Aparicio, et al. presented in evidence the mail carrier’s notation “moved out 11/05/07.”

As it was, Aparicio, et al. did not present a certification from the postmaster or the testimony of the mailman pertaining to how, when, and to whom the delivery and receipt was made. All they had was the purported mail carrier’s notation “Moved out’ 11/05/07,” which does not suffice for purposes of proving that MBC moved to a new address without notice to the LA. More, they could have submitted in evidence the so-called joint declaration indicating counsel’s old address and not his new address, but they failed to do so.

Aparicio et al.’s employment was validly terminated on ground of redundancy, one of the authorized causes for termination of employment under Article 298 of the Labor Code, as amended.

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. While a declaration of redundancy is ultimately a management decision, and the employer is not obligated to keep in its payroll more employees than are needed for its day-to-day operations, management must not violate the law nor declare redundancy without sufficient basis.

A valid redundancy program requires the following: (1) written notice served on both the employees and the Department of Labor and Employment (DOLE) at least one [1] month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one [1] month pay forevery year of service; (3) good faith in abolishing the redundant positions; and [4] fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished, taking into consideration such factors as (a) preferred status; (b) efficiency; and (c) seniority, among others. (Aparicio vs. Manila Broadcasting Company, G.R. No. 220647, December 10, 2019)

Aparicio, et al. were served notices of retrenchment which took effect thirty (30) days later. MBC also submitted its Establishment Termination Report to the DOLE containing the reasons for its adoption and implementation of the redundancy program. The employees were likewise promptly given their separation pay.

Based on MBC’s “Hating Kapatid” program, FFES Bacolod was shut down as relay station of DZRH. Its continued operation was deemed unnecessary because DZRH anyway could be heard in Bacolod through FFES Iloilo. Consequently, petitioner who were both assigned at FFES Bacolod had to go, as well. Courts will not interfere unless management is shown to have acted arbitrarily or maliciously. For it is the management which is clothed with exclusive prerogative to determine the qualification and fitness of an employee for hiring or firing, promotion or reassignment. Indeed, an employer has no legal obligation to keep more employees than are necessary for its business operation.

In labor cases, as in other administrative proceedings, only substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required.